Visitor growth to Macau has slowed notably and turned negative in mid-2012, compared to the heady 20% growth during much of 2011. While China accounts for more than 50% of Macau’s visitors and is near peak levels, the two most important specific regions for visitors, Hong Kong and Guangdong, have been declining since mid-2011.
China’s Free-Spending Macau Tourists More Restrained
Chinese spend more in Macau per capita than other groups, though this premium has eroded 46% since its crest in 2008. Even so, China’s spending is still more than twice that of Hong Kong visitors, the second most sizable group of tourists. On a positive note, this indicator has improved since late 2011, supporting the total per capita level.
Off the China Farm, Into the Factory, on to the Casino
Tens of millions have moved from China’s farms to urban jobs in the past six years alone, driving wage growth and consumer spending across the economy. Gaming, like other discretionary activity, benefits directly from increased disposable income as well as indirectly from wealth creation through the housing market and other means.
Macau Built It… and They Came; Will the Cycle Repeat?
Massive green-field construction has driven a two-fold expansion in Macau casinos since 2006. With new integrated resorts, the size and scale have also jumped, with the number of tables rising more than 3x and slots 5x, supporting significant growth in gaming and other revenue. Further Cotai Strip development promises more on the way.
Conventions Far From a Boondoggle for Macau
Industry trade shows bring Macau’s integrated resorts multiple benefits, including food and beverage business and lodging and conference management fees, as well as gambling revenue. The event size and resulting number of attendees has continued to grow, even though the number of shows has dropped 38% since 2010.